A letting agent’s advert which claimed to offer huge savings over other agents has been banned by the advertising watchdog.
Chelmsford City Lettings said in a regional press advert that it offered: “Full Management Service £195 + 8% + Free Rent Guarantee ... Compared to other agents average savings of £1000 ... Fixed Fee Let Only Service £295 ... Compared to other agents annual savings of £500.”
Martin & Co successfully challenged whether the savings claims were misleading, and could be substantiated.
Chelmsford City Lettings, which displays the TPO logo on its website, said it had calculated the average saving claim using an average Chelmsford house value of £255,321; an average monthly rental for a property of that value of £1,000; and average ‘modest letting agent fees’ of 12% per month.
It said it had got the figures from various internet sources.
The firm also submitted a spreadsheet containing information regarding letting fees that it had collected directly, by telephone, from five competitors, along with a copy of its own fee structure, which it felt further supported the savings claims.
However, the Advertising Standards Authority said it had submitted insufficient documentary evidence. The firm had not demonstrated that it had contacted all its competitors, rather than just a selection.
The property values and rental figures backing the firm’s claims might not be representative of the Chelmsford market as a whole, particularly since the properties in the advert were one-bed flats with monthly rents of £585 and £750.
The ASA said that the savings claims had not been substantiated and the advert was misleading.
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Comments
It's difficult to provide a precise definition of 'rogue' however we believe such an agent is one who fails to provide customers with adequate protect in terms of insurance & redress, fails to follow or ignores legislation and which fails to ensure staff are properly trained. All costs and charges must be transparent. All monies properly accounted for, ring-fenced and protected.
Intent is what makes a rogue a criminal, however ignorance is no defence and an agent has a duty to ensure they are compliant.
Cheap fees never work
An agent in Leicester advertises on his website (and heavily on Googleads and local radio) that he charges 4% for full management. His website also claims that he has two offices, seven "fully trained" staff and an account manager available 24 hours a day.
He doesn't even appear to be VAT registered which means that he's claiming to support 7 staff (at least one of whom is on call 24 hours a day) and the inherent running costs of two offices on a turnover of less than £80,000 per year.
Do the maths for yourself and see if you think that lot adds up.
Chelmsford City Lettings clearly don't value their service - or are simply desperate. A cheap website, no accreditation, no CMP. You get what you pay for.
They have only been going a short time and this demonstrates their inexperience.